Fallin Signs Legislation to End Zero-Emission Tax Credit

Governor Fallin started her week by signing a bill that moves up the sunset date for the zero-emissions tax credit. House Bill 2298 moves up the end date to July 1, 2017. The wind industry defended the tax credit even as members of the oil and gas industry called for its early termination.

“The wind industry for Oklahoma is an essential piece of my ‘All of the Above’ energy strategy. With the support of the zero-emissions tax credit, our state has become a national leader in wind energy. Currently, Oklahoma ranks third in the nation in total installed wind capacity, with nearly 7,000MW in the ground. This accounts for more than 25 percent of the state’s electricity generation mix, and is an important contributor to Oklahoma having the lowest cost of electricity in the nation,” said Fallin in her statement she issued after signing the legislation.

The original sunset date for the zero-emissions tax credit was December 31, 2020. The Incentive Evaluation Commission reviewed the credit last year. It suggested lawmakers consider reconfiguring the program to cap credits or accelerate the closing of the program.

According to figures used by the Incentive Evaluation Commission, the program cost the state $3.7 million in 2010. By 2012, it was nearly $43 million, and in 2014 the credit cost the state more than $113 million. However, Oklahoma Tax Commission figures show the state paid only about $60 million in 2014. The reason for the difference in figures is that those companies “cashing out” the tax credit rebate only get a percentage of it.

Fallin also noted that the wind industry does play an important role in Oklahoma.

“The zero-emissions tax credit was key to the growth of wind energy in Oklahoma, and I’m grateful to the industry for their ambitious successes, as well as their willingness to work with the state to address our challenging budgetary circumstances. Their leadership, along with the leadership of Speaker McCall and Senate Pro Tem Schulz, is a critical part of our continued investment in the future of our state. It is time to ensure that Oklahoma has a bright future, and continues its position as a prominent energy state.”

Jeff Clark, president of The Wind Coalition said, “Oklahoma’s wind incentives have served their purpose well, attracting billions in private investment to rural areas, lowering electricity prices, creating new jobs and providing property tax revenue for rural school districts. As an industry, we are proud that these incentives worked so well for the benefit of Oklahoma, but we recognize that, as an industry matures, incentives should be examined and adjusted to reflect that growth. We hope that other industries will recognize the state’s challenging fiscal situation and follow our lead. If it chooses to do so, Oklahoma can be a leader in the energy development that will drive our nation’s economy in the decades ahead. That includes natural gas, wind energy, solar power and energy storage.”